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Boom, bust and bewildered: Bitcoin's year so far

Reuters2021-07-01

LONDON, June 30 (Reuters) - If you're a bitcoin investor, your nerves may have taken quite a pounding in 2021.

The cryptocurrency's journey towards the investment and commercial mainstream has gathered pace, with major financial firms and companies embracing the emerging asset.

Such interest helped push it to a record high just shy of $65,000 in April. Yet in typically capricious fashion, it has since slumped by almost half.

At the halfway point of the year, the original and biggest cryptocurrency is up around 20% year-to-date. Here are some charts that tell the story of bitcoin's year so far.

1/STILL VOLATILE

Wild price swings have been a defining feature of bitcoin throughout its near 13-year life. The first half of 2021 has been no different, despite hopes that greater liquidity in markets and stronger infrastructure would dampen swings.

Bitcoin more than doubled from the start of the year to its all-time high of $64,895 hit in mid-April, before slumping by over half in just five weeks as regulators across the world - especially China - cracked down on cryptocurrencies.

In May alone bitcoin lost 35%, in its worst month since 2018. Last week it fell under $30,000 for the first time since January, briefly wiping out its year-to-date gains.

Many larger investors also left the bitcoin market after prices spiked in the first quarter, with some shifting to gold, according to JP Morgan analyst Nikolaos Panigirtzoglou.

"What we found out in the second quarter was that actually demand for bitcoin is price sensitive," he said. "Some institutional investors started getting out of bitcoin in April ... they thought bitcoin prices were too high relative to gold."

2/BITCOINS OR ALTCOINS?

Bitcoin has attracted the lion's share of the headlines so far this year. Yet many of its smaller digital currency rivals - known as the altcoins - have posted bigger gains.

Ether , the second-largest cryptocurrency, has nearly trebled so far this year, bolstered by a surge in the so-called decentralised finance sector. "DeFi" often uses its underlying blockchain technology to offer financial services without traditional middlemen such as banks.

Signs that the ethereum blockchain is gaining traction with mainstream financial firms has also fuelled gains.

XRP , the seventh-largest coin, has gained a similar amount. Other once-obscure coins such as dogecoin, started in 2013 as a joke, have also far outpaced bitcoin, with investors drawn to the prospect of quick gains. Dogecoin is up over 5,000% so far this year.

3/OUTPACED BY MEME STOCKS

Retail investors have embraced bitcoin this year, attracted by narratives that it can act as a hedge against inflation and as a future payment method.

Also driving gains has been a perception that it is a vehicle for quick gains - a perceived quality shared by another 2021 financial market phenomenon: "meme" stocks, whose value is propelled by social-media buzz.

GameStop Corp and AMC Entertainment Holdings, two of the leading meme stocks, soared in the first quarter along with bitcoin, fuelled by retail investors with spare cash and free time because of coronavirus stimulus lockdowns.

Yet the assets have since decoupled, with bitcoin's gains for the year so far outpaced by GameStop - up more than 1,000% - and AMC Entertainment, which has surged over 2,500%.

"It's just an extension of free money just going crazy and so I think that has somewhat you can see that rippling over into cryptocurrencies," said Joel Kruger, a strategist at crypto exchange LMAX Digital.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment34

  • kenong62
    ·2021-07-02
    It's roller coaster
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  • Jenjorjack
    ·2021-07-02
    This will probably not end well. Please like andcommment thanks
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    • kenong62
      done
      2021-07-02
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  • TheHaq
    ·2021-07-02
    Holding crypto for the long run
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  • STKG
    ·2021-07-02
    Waiting you think is the right time to enter ? When is the right time? ??
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    • WarSlasher
      add slowly every dip, no right time for alt coins
      2021-07-02
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  • TK360
    ·2021-07-02
    Volatile 
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  • HHLim
    ·2021-07-02
    Ok
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  • Tansw
    ·2021-07-01
    [強] 
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  • Pixiestars
    ·2021-07-01
    Still waiting for bitcoin to drop to $20k before entering.
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  • Jokhang
    ·2021-07-01
    Bitcoin for the long term?!
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  • ggggigi
    ·2021-07-01
    Glad I didn’t buy when it’s all time high 
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  • Elex
    ·2021-07-01
    Woowowoow
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  • Moneywizpd
    ·2021-07-01
    ?
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  • Sam51
    ·2021-07-01
    Pls like and comment tq 
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    • Tan123
      comment
      2021-07-02
      Reply
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  • William C
    ·2021-07-01
    ?
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  • Meshaarias72
    ·2021-07-01
    Like n comment pls
    Reply
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  • DarrylMiles
    ·2021-07-01
    Great!
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  • Ahdi
    ·2021-07-01
    OK
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  • 2MDB
    ·2021-07-01
    Like please 
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  • AzuNyaa
    ·2021-07-01
    It's a scam
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    • AzuNyaa
      no difference from Ponzi scheme
      2021-07-01
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    • Meshaarias72
      Y
      2021-07-01
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  • Et67
    ·2021-07-01
    To the moon!! 
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